'David Cameron’s attitude is reprehensible and irresponsible, and some will argue that Clegg should have drawn a red line.' Photograph: Carl De Souza/AFP/Getty Images

If there's one good thing to come out of David Cameron's intransigence over the eurozone crisis, it is the demolition of the myth that Liberal Democrats support every last detail of coalition policy. It is as plain as day that Nick Clegg has been overruled on this. He still loyally declares his ownership of the government's position – because he believes that cabinet responsibility is paramount, even in coalition. But there is no doubt that he fought tooth and nail against it in private – and, for once, that will be widely recognised.

The most frustrating thing about Clegg's general approach to coalition government is his refusal to spell out in public when and where Liberal Democrats have fought internal battles with the Conservatives. For most Liberal Democrats, the justification for our presence in government is twofold: first, to take some steps towards building a fairer, more liberal, society; and second, to stop the worst excesses of the Tories. There has been some success. Liberal Democrat ministers might lose more battles than they win, but they win more than one could reasonably expect from the junior party. But how can the party convince sceptical voters that we are standing up to the Tories if we don't tell them when we disagree?

No politician likes to highlight their losses. But this one is too obvious to hide. Refusal to work with European countries on financial stabilisation is not a line that Clegg would – or could – ever agree with. He is a passionate pro-European – probably the most passionate of all Liberal Democrats. So there is no question of him having compromised his party's concerns for his own advancement. It is his personal views that have been trampled on by Cameron's lurch back to Euroscepticism.

For passionate pro-European Lib Dems, Cameron's attitude is reprehensible and irresponsible, and some will argue that Clegg should have drawn a red line. Others in the party might willingly trade a defeat over Europe (not the issue on which most voters prefer our position to the Tories') in return for a clear win on a more important domestic issue. What about, for example, a tax on bankers' profits to finance investment in job creation? Liberal Democrats have most to gain by showing that they are fighting for those worst affected by the all-but-recession we are in. If we have to win some and lose some, we need to pick the right battles to die in a ditch over.

However, the two priorities actually converge. Taxing the banks to help rebalance the economy is pretty much what the Germans and French were proposing. That makes Cameron's posturing much worse. He claims to have defended Britain, but has defined the "national interest" as protecting the City of London, specifically from a financial transactions tax, which is popular with many British voters. Even those who dislike new taxes and regulations recognise that the City is part of the problem. Ironically, the most Eurosceptic newspapers have spent most of the year attacking bankers' greed and blaming them for creating the financial crisis. Occupy London protesters claim with some justification that 99% of the public want to see the bankers restrained. If that is true, it includes a lot of Conservative voters. So Cameron is willing to throw away all British influence over the direction of the European economy for the sake of a tiny sector that justifiably has little public sympathy.

If the euro fails, it will cause untold harm to the UK economy. That Eurosceptic Tory backbenchers see this as a good time to grandstand reminds us how blinkered they are. That Cameron prefers to appease them than his coalition partners should be of grave concern to all Liberal Democrats. But at least the cat is out of the bag. The onus is now on Nick Clegg to make a virtue of it. He needs to produce a big, unmistakable Liberal Democrat win, fast. And allow his ministers to start telling the truth in public. There are bits of coalition policy that we genuinely support. But there are plenty of Tory ideas that Liberal Democrats cannot stand. Let's start saying so.